Pound rises after upbeat UK GDP data

The pound rose on Monday after the monthly GDP
figures eased fears that the U.K. economy would succumb to its first recession
since the financial crisis.

As of 09:47 GMT, the British pound surged against
the U.S dollar by 0.55 percent at $1.2348, while the highest level
recorded during the session was at $1.2355.

The Office for National Statistics said that
economic output in July alone was 0.3 percent, the largest increase since
January, topping analysts’’ projections 0.1 percent growth.

In the three months to July, the economy
recorded no growth, following a 0.2 percent drop in the second quarter. Economists
had penciled in a contraction of 0.1 percent.

Britain’s services index, which represents about
80 percent of British economic output, rose 0.3 percent in July after
four months of stagnation, it is the biggest rise since November 2018.

Manufacturing production grew by 0.3 percent in
July, compared to both previous and predicted readings of -0.2 percent and -0.3
percent respectively.

On the political front, a legislation to prevent
a no-deal Brexit is predicted to gain formal consent today, where Prime
Minister Boris Johnson is likely to fail in his second attempt for a general
election.

Boris Johnson’s office has confirmed that directly
after Monday’s business is concluded, Parliament will be suspended until October
14.

Last week, the pound rose more than 1 percent
versus the green currency after falling to its lowest level October 2016 at
1.1958.

Versus the euro, the pound pushed the EURGBP
lower to a low of 0.8904, the lowest level since July 25, ahead of ECB meeting
on Thursday.

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